Features

The Packaging Ink Market

By Bridget Klebaur, Associate Editor | May 1, 2014

Packaging inks continue to be a growth area for printers and ink manufacturers, with particularly strong opportunities in low migration inks for food packaging, flexible packaging, energy curing and narrow web and label.

The overall packaging and packaging ink markets are expanding globally, as the worldwide economic recovery continues. Segments such as flexible packaging and narrow web and label are performing particularly well.

Grant Shouldice, vice president marketing and technology, packaging inks, North America, Flint Group, said that it appears the market is bouncing back.

“Most converted packaging and label segments into which we supply ink appear to be bouncing back from the lows experienced over the last few years,” Shouldice said. “Converted flexible packaging and narrow web label segments appear to be growing faster than paper and board as converters win in the marketplace with excellent graphic quality and cool form factor.”

“With the U.S. economic recovery underway, Wikoff Color continues to see moderate packaging growth in North America,” said Daryl Collins, vice president of sales and regional operations, at Wikoff Color. “Conventional litho on folding cartons is steady, energy curable litho continues to show progress, water and UV flexo on folding cartons is also expanding and flexible packaging growth is the most significant.”

The packaging ink market has always been a strong point for INX International Ink, and 2013 was no exception.

“The growth in the packaging ink business appears to be consistent and getting stronger, and figures for 2014 may improve on what we did last year,” said Mark Hill, vice president, research and development, INX International Ink Co.

Photo courtesy of hubergroup.

John Copeland, Toyo Ink America’s president and COO, reported that the packaging and packaging ink markets in North America had conservative single-digit growth. Toyo Ink is seeing growth in the flexible packaging markets with pouches, bags and with surface and lamination designs. “These markets were very stable and solid this past year,” Copeland added.

Dr. Thomas Griebel, product and key account manager packaging inks, North America for Hostmann-Steinberg Limited, noted that the packaging market has been steady, based on solid GDP growth and increased consumer confidence.

“In food packaging (e.g. seafood) and beverages, we saw a trend to premium products at the expense of mid-price segments,” Dr. Griebel added, noting that Hostmannn-Steinberg is seeing growth in solvent- and water-based flexible packaging and cigarette packaging, if the trend to smaller runs continues.

In terms of markets, Flint Group is seeing growth in the flexible packaging market.

“We’re seeing growth in flexible packaging, especially the higher end laminate segments, as well as narrow web label continue to outpace other segments in terms of bouncing back to traditional CAGR,” said John Gaber, product director packaging inks, North America, Flint Group. ”Also growing is the shrink sleeve market.”

Photo courtesy of Flint Group.

For Sun Chemical, the flexo, folding carton and corrugated markets are growing.

“Additional growth comes from the narrow web, tag and label printing segments,” said Tony Renzi, vice president, product management packaging, North America Inks, Sun Chemical. “Source reduction, a smaller number of packaging layers, along with decreased package size continue to be ways consumer packaged goods companies are looking for support in their sustainability efforts. Additionally, both major retailers and brand owners currently favor biodegradable and more recyclable flexible packaging materials.”

Hill said INX is seeing the best growth in packaging inks for plastics. While most of the growth on plastic has been solvent-based inks, water-based and the UV/EB segment has also been strong.

Trends in Water-Based, Solvent-Based and UV Curing

While solvent-based inks remain a mainstay in segments such as flexible packaging, there is growing interest in water-based and energy curable inks.

“We are starting to see a stronger interest in water-based inks and energy curable inks, especially LED cured, for film substrates, which seems to be a second push for technology that is both environmentally friendly, sustainable and efficient,” said Shouldice. “However, solvent-based inks based on bio-renewable content of up to 80% are only going to come down in cost as the feedstocks get to commercial scale.”

“This is due to an increased awareness of carbon footprint/life cycle analysis by CPGs,” said Robert Callif, vice president, BCM Inks, a specialist in the corrugated market. He added that the company enjoyed growth in 2013.

Collins said that energy-cure technologies, both UV and EB, would keep growing because of the benefits they offer a printer. “Solvent-based inks are entrenched in the rapidly growing flexible packaging market, and as we see the technologies of narrow web flexo presses, plates and aniloxes improve, we will continue to see growth in water-based flexo on packages,” he added.

Low migration for food packaging is an important market focus for brand owners and printers alike, and ink suppliers are developing products to meet these needs. Toyo Ink has found that more customers are requesting formation on low migration products.

Wikoff Color has found that there is definitely growing interest in the field of low migration inks.

“It’s all anybody is talking about, both in the U.S. and Europe,” said Dr. Don Duncan, Wikoff Color’s director of research. “It’s not like the inks used for food packaging over the last decades have been ‘high migration,’ but this thinking of eliminating migration of all ingredients, even if they are known to be safe, is a much, much more conservative position than U.S. law requires. The pendulum on this may begin to swing back to a more pragmatic position at some point, but right now it is still swinging out.”

INX has noticed growth, particularly on the UV/EB side.

Photo courtesy of Flint Group.

“With conventional inks, there have been some interest and inquiries regarding migration, but typically conventional raw materials have been accepted over the years as being safe,” said Hill. ”Of course, the guidelines seem to be constantly changing these days, so what’s acceptable today may not be in the future.”

“Low migration packaging continues to be a market focus, but rather than describe the focus as low migration inks, it is more accurate to describe the interest as low migration packaging,” said Renzi. “This means that all the materials in the packaging construction and process contribute to a low migration package.”

Shouldice said that there has been a steady growth in demand for low migration energy cure systems across all print processes. He added that growth in this area in North America will be driven by regulations and further education of the printers and brand users – and consumers.

New Technologies

With the packaging industry enjoying growth and brand owners looking for new technologies to differentiate their products ink manufacturers are introducing new products for the industry.

Wikoff has made a significant investment in formulating and manufacturing inkjet inks with a state-of-the-art facility in their Fort Mill, SC plant.

“Inkjet technologies are not yet widespread in the packaging industry, but as the technologies improve, speeds rise and costs fall we will see more customized packages involving inkjet printing,” Collins said.

INX has developed two high-speed flexographic inks for the flexible film market. Synergy and Innova can print at speeds up to 2000 feet per minute and they have also developed water-based inks with improved printability at high press speeds. On the energy cure side, they developed offset HUV and LED curable inks. The LED inks meet current low migration standards.

Dr. Griebel noted that Hostmann-Steinberg has launched CORONA label MGA, the first low migration inks for non-absorbent substrates with focus on IML.

BCM Inks has developed PCR Black which is a black ink made from leftover ink from recycled ink cartridges.

On the flexible packaging side, Flint Group is offering high speed/high definition ink technologies – Veloce and FlexiBase HDP – which enable printers to increase throughput and visual appeal.

On the paper and board side, Flint Group has launched a low maintenance/high performance strategy that allows printers to push the limits for graphics and efficiencies in the pressroom through its PremoCorr and PremoCup brands.

In sheetfed packaging, Flint Group has launched Ultraking XCURA LED – UV LED ink technology, and will soon launch Ultraking Shrink U.

In narrow web, Flint Group is growing its EkoCure UV LED brand – adding metallics, shrink whites, additional coatings and adhesives. In addition they have launched two new UV rotary screen whites to complement the CombiWhite line of products.

“Flint Group is constantly developing and launching new products to support the ever growing and changing market for packaging and labels,” Gaber said.

Sun Chemical reports that its new SunUno Solimax multi-purpose ink system will maximize pressroom efficiency while simplifying the overall print production process.

“The SunUno Solimax ink system is the latest generation of inks providing a single platform that can cover multiple end use applications,” Renzi said. “The ink system provides the shelf stand out and high quality packaging for today’s competitive industry and is intended for surface printing and lamination for various end-use applications, such as lidding materials, medical laminates and food packaging for confectionery and snack food.

Renzi noted that narrow web tag and label (NWTL) printers that use water-based flexo inks can now decrease their overall bottom-line operating expenses in ink volume and ink costs by up to 25% with the new Sun Chemical Water-Based Flexo Dispenser Program.

“The newest version of Sun Chemical’s highly successful Dispenser Program for commercial and NWTL printers allows NWTL printers to mix exactly the amount of water-based flexo inks that they need, reduce their inventory and waste, improve color-matching consistency and significantly decrease total operating costs,” Renzi added. “The water-based flexo dispenser is unique in that it can make process, blending bases and spot colors all from the same machine. Color concentrates and technology extenders can be dispensed to make inks for more than one application, providing printers the flexibility to control color density and compensate for various anilox configurations.

Converters looking for inks that provide high print quality and color strength can benefit from Sun Chemical’s SunVisto Advantage HS, a new ink that delivers both superior print quality and the pH stability needed for corrugated stocks.

“SunVisto Advantage HS inks provide for higher color strength for use with higher line aniloxes and eliminate the need for special GCMI color matches when added strength is required to hit GCMI color targets,” Renzi said. “The Advantage HS inks are also 40% to 50% stronger than conventional mid-grade GCMI inks.”

Raw Materials

Raw materials have had a major effect on ink manufacturers in recent years, but the past year has witnessed some stability. Diane Parisi, vice president, supply chain management for Flint Group, noted that raw material prices have stabilized somewhat, albeit at higher prices, which is now the new norm.

“There are a few areas of concern around pigments and pigment intermediates related to environmental and regulatory challenges in India and China that could effect the supply chain and result in price increases if they come through,” Parisi said. ”The consolidation of the TiO2 market is cause for concern by ink makers, but we will see how that plays out once the transaction is finalized. Many ink-based materials are still considered cheap or low value add and therefore have upward pricing potential, especially if there is any disruption in the worldwide geopolitical situation.”

In 2013, Sun Chemical saw a more stable environment emerge for raw material supply and prices.

“Even with a moderate improvement in global economic activity in 2014, our expectation is that we will see a continuation of this trend,” Ed Pruitt, chief procurement officer, Sun Chemical, said. “Although on average we expect relative stability, there are feedstocks and raw materials that will bear careful watching. Titanium dioxide producers experienced poor profitability last year and will continue to press for price increases buoyed by the expectation of improving demand. Pigments from Asia will continue to be impacted by the increasing and somewhat unpredictable enforcement of environmental regulations in China and India. Aromatic and oefinic petrochemical feedstocks are expected to be in reasonable supply. However, unplanned production issues can quickly place pressure on the resins and intermediates that are derived from these products.”

Pruitt noted that the second half of 2013 saw a dramatic run up in gum rosin prices despite relatively flat demand.

“This run up had a major impact on the cost of rosin resins used in offset printing,” he added. “Successful gum harvests in 2014 could help to bring these costs back to a more supportable level.”

Ben Price, director of purchasing at Wikoff Color, said that while he is not seeing either sharply rising prices or significant risks to their raw material supply, areas such as rosin-based resin are a concern.

“There are areas within our broad range of raw materials that are requiring greater attention,” Price noted. “Of particular concern are rosin-based resins for our oil-based inks. The supply of crude tall oil, which is used to make tall oil rosin, is being constrained by a number of factors. Additional pressure on rosin-based resins comes from the fact that the other source of rosin, Chinese gum rosin, is near historically high prices. These two influences are working together to create tightness in the rosin resin market.

“On another note, there has been upward movement in styrene pricing recently, which could affect our water-based inks and coatings, but that appears to be a temporary spike rather than a long-term trend, and we expect styrene prices to retreat by summer,” Price added. “Pricing for titanium dioxide has been stable for some time after retreating from historic highs, but there is some evidence that these prices could increase in the summer.”

As the printing ink industry reaches a more mature stage, Sun Chemical is seeing several strategic responses from their supply base.

“One of those responses is a move to increased consolidation in our suppliers’ industries,” Pruitt said. “ A good example of that is the pending acquisition of Rockwood’s titanium dioxide business by Huntsman Corporation. Another strategic response is the spin off and sale of our suppliers’ businesses to private equity investors. This has been particularly popular among resin manufacturers, but there are also examples in carbon black and other markets.

“A third response we have seen is the diversification of our suppliers’ product offerings into new markets, thereby reducing their dependence upon the graphic arts industry,” Pruitt added. “While all of these responses are understandable in light of new economic conditions, they nevertheless present a set of challenges to the ink industry. Challenges such as fostering viable supplying markets; maintaining long term views and relationships; and, continuing to receive the high level of technical and customer support we value.”

Toyo Group also sees supplier consolidations as challenging.

“We see supplier consolidations as troublesome when we are left with few manufacturers of certain products purchased in our supply chain,” Copeland said. “This creates both supply and pricing issues for our industry as well as the Toyo Group.”

BCM Inks also noted that it is seeing consolidation among its suppliers and customers.

“We see this trend continuing as long as private equity and individual companies have significant cash to invest,” said Callif. “Consolidation could have a positive or negative business impact depending on your side of the equation.”

“It has not affected us at INX that much, but tightness in the market due to consolidation of ink raw materials certainly had an impact on availability,” Hill said. “We have also experienced increases in lead time and price.”